Spring 2014 GWU MBAD 6211 HC Case: Colonial Back Crackers Colonial Back Crackers is a small physical therapy practice in the Washington DC area. Colonial has been in business for several years focusing on providing PT services and products. George, a GWU MBA grad, founded and continues to run the business.
For various reasons including new entrants in the PT space and margin compression from reduced payments from insurance…show more content… Here are the summary transactions for the remaining 4 months of the year:
1.
The firm paid off all existing accounts payable to the suppliers
2.
It paid $130,000 on two-day vacation for its most important suppliers.
3.
To announce the newly integrated facility, Buff spent $100,000 contacting Colonial’s customers and letting them know of the additional services Buff offers.
4.
Gross purchases of inventory totaled $11,230,000. Purchase returns were $25,000. The firm was conscientious about taking cash payment discounts and took $120,845 in cash discounts. At year-end the firm had remaining accounts payable of $1,480,000.
Transportation-in costs, all paid in cash, were $130,000 [hint: you can calculate cash paid to suppliers for inventory purchases from this information.]
5.
All sales are on credit. Sold inventory for $18,500,000 at a gross profit
